CNBC's Larry Kudlow Tees Up John McCain

Over the past week, John McCain has been working
hard to persuade business and Wall Street types that he doesn't
really think they're a bunch of greedy bastards. This morning,
for example, he chatted with CNBC's Larry Kudlow.

Transcript courtesy CNBC:

LARRY KUDLOW: LET ME
GO BACK TO THE FIRST QUESTION, WHICH YOU WERE BEGINNING TO
ANSWER. WE'VE HAD THIS TERRIBLE STOCK MARKET SLUMP. SOME SAY $3
TRILLION WORTH OF WEALTH HAVE BEEN LOST BY INVESTORS IN THE
INVESTOR CLASS, AND I WAS ASKING, AND I THINK YOU WERE ANSWERING,
WHAT IS YOUR PLAN TO CREATE SOME RECOVERY IN THE STOCK
MARKET?

JOHN MCCAIN: KEEP
TAXES LOW, CUT SPENDING, CREATE JOBS WITH ALTERNATIVE ENERGY,
INCLUDING NUCLEAR POWER PLANTS, INCLUDING DRILLING OFFSHORE,
WIND, TIDE, SOLAR, FREE US FROM OUR SENDING $700 BILLION OR
WHATEVER IT IS ACROSS TO COUNTRIES THAT DON'T LIKE US VERY
MUCH.FREE UP CREDIT.LARRY, I'VE BEEN MEETING WITH A LOT OF SMALL
BUSINESSPEOPLE, AND THEY'RE HAVING GREAT DIFFICULTY GETTING LINES
OF CREDIT. THIS IS SOMETHING WE'VE GOT TO FREE UP. NOW, WE HAVE
GIVEN THE BANKING, THE BANKS AND OTHER INSTITUTIONS THE KIND OF
INFUSION THEY NEED. IT'S TIME THEY PASS THAT ON TO SMALL
BUSINESSES WHO SAY THEY CAN HIRE. THEY'VE GOT BUSINESS, BUT THEY
JUST HAVEN'T GOT THE LINE OF CREDIT. BUT MAKE SURE THAT EVERYBODY
KNOWS THAT WE'RE GOING TO KEEP TAXES LOW. WE'RE NOT GOING TO
RAISE TAXES. WE'RE THE CREATOR OF BUSINESS AND THE ENGINE OF OUR
ECONOMY AND SMALL BUSINESS, SENATOR OBAMA'S PROPOSAL WOULD TAX
HALF OF ALL SMALL BUSINESS INCOME, SOME 16 MILLION JOBS IN
AMERICA WOULD BE AT RISK. THEN YOU PUT ON TOP OF THAT, HE WILL
FORCE HIS MANDATED HEALTH CARE PLAN ON SMALL BUSINESSES, THEIR
EMPLOYEES, AND THEIR CHILDREN. IT'S NOT GOOD FOR AMERICA.

KUDLOW: JUST ON THE
CREDIT PIECE THAT YOU MENTIONED A FEW MOMENTS AGO, HAVE YOU AND
YOUR CAMPAIGN BEEN FOLLOWING THE IMPROVEMENT IN THE LIBOR CREDIT
MARKET IN LONDON AND THE COMMERCIAL CREDIT MARKETS HERE IN NEW
YORK? IT LOOKS LIKE THE TREASURY PLAN IS BEGINNING TO WORK. THAT
MAY BE A POSITIVE SIGN. DO YOU FOLLOW THOSE AREAS?

MCCAIN: YEAH, I DO,
AND I GET UPDATES ALL THE TIME. ONE OF THE AREAS THAT I'M STILL
VERY DISAPPOINTED IN, THOUGH, LARRY, AND YOU MAY NOT AGREE WITH
ME, WE'VE GOT TO GO IN AND GET THESE HOME MORTGAGES BOUGHT AND
GIVE PEOPLE MORTGAGES THEY CAN AFFORD SO THEY CAN STAY IN THEIR
HOME.LOOK, I'M IN OHIO.HOMES ARE BEING FORECLOSED EVERYWHERE. A
LOT OF THESE PEOPLE, IT'S THEIR PRIMARY RESIDENCE, COULD STAY IN
THEIR HOMEs IF THEY HAD A NEW MORTGAGE AT THE NEW VALUE OF THEIR
HOME, AT PAYMENT LEVELS THEY COULD AFFORD. THAT IS THE SLOW --
ONE OF THE SLOWEST PARTS. I THINK IT'S THE SLOWEST PART RIGHT
NOW. KEEP PEOPLE IN THEIR HOMES. IF THEY CAN'T REALIZE THE
AMERICAN DREAM AND STAY IN THEIR HOMES, THEN OBVIOUSLY, THE REST
OF THIS EQUATION IS HARD TO COMPLETE.

KUDLOW: LET ME SWING
BACK TO THE INVESTOR SIDE.THERE ARE ABOUT 100 MILLION INVESTORS,
ACCORDING TO THE FEDERAL RESERVE SURVEY.AND INTERESTINGLY, IN
RECENT NATIONAL ELECTIONS, THEY'RE A HUGE VOTING BLOC, ALMOST TWO
OF EVERY THREE VOTES CAST ARE CAST BY PEOPLE THAT OWN STOCKS
EITHER DIRECTLY OR INDIRECTLY. AND YET, SIR, YOU VERY, VERY
SELDOM MENTION INVESTORS ON THE CAMPAIGN TRAIL. WHY IS
THIS?

MCCAIN: WELL, I TRY
TO TALK ABOUT THEM MORE OFTEN. A LOT OF THE PEOPLE THAT COME,
FRANKLY, ARE PEOPLE THAT ARE HAVING TROUBLE STAYING IN THEIR
HOMES, KEEPING THEIR JOBS, ET CETERA. BUT I THINK IT GOES BACK TO
ALL THIS BUSINESS OF SENATOR OBAMA'S VIEW OF "FAIRNESS." WHEN
CHARLIE GIBSON SAID, WHY WOULD YOU WANT TO RAISE CAPITAL GAINS
TAXES WHEN YOU KNOW IT

WOULD DECREASE
REVENUE? AND HE SAID IN FAIRNESS. AND HE TOLD JOE THE PLUMBER --
JOE THE PLUMBER GOT THE MESSAGE THROUGH WHAT WE'VE BEEN TRYING TO
DO THIS WHOLE CAMPAIGN. HE WANTS TO "SPREAD THE WEALTH AROUND."
THAT TAKES FROM THE INVESTOR

CLASS, THAT TAKES
MONEY FROM ONE GROUP OF AMERICANS AND GIVES IT TO ANOTHER.NOW,
THAT SIGNAL HAS BEEN VERY

CLEAR, AND I THINK
PEOPLE OUGHT TO PAY ATTENTION TO IT, BECAUSE IT'S BEEN TRIED
BEFORE IN OTHER COUNTRIES, AND POLICIES OF OTHER LEFT, LIBERAL
ADMINISTRATIONS. IT DOESN'T WORK, AND IT'S BAD FOR AMERICA. WE
WANT TO ENCOURAGE THE INVESTOR CLASS, AND THAT MEANS CAPITAL
GAINS AND DIVIDEND TAXES ARE LOW.

KUDLOW: YOU'VE JUST
UNVEILED A NEW TAX CUT ON CAPITAL GAINS.CAN YOU TELL US ABOUT
THAT? BECAUSE IN SOME SENSE, THAT'S PROBABLY THE MOST IMPORTANT
INVESTOR-CLASS TAX.

MCCAIN:IT'S THE MOST
IMPORTANT IN MANY RESPECTS, LARRY, AND WE WANT IT LOW AND WE WANT
IT LOWERED. EVERY TIME -- THERE'S ONE TAX THAT THERE'S NO
ARGUMENT ABOUT, THAT EVERY TIME IT'S BEEN LOWERED SINCE JACK
KENNEDY, WE HAVE SEEN AN INCREASE IN

REVENUES. NOW, WHY
ANYBODY WOULD ARGUE, AS SENATOR OBAMA DOES, THAT WE NEED TO RAISE
IT, EVEN IF IT'S -- OF COURSE, THE AMOUNT NEEDED TO RAISE IT IS
VARIED WITH WHATEVER POLL HE'S TAKEN, BUT THE POINT IS THAT WE
WANT TO LOWER IT AND KEEP IT LOW AND ENCOURAGE INVESTMENT,
ESPECIALLY NOW IN AMERICA IN THESE DIFFICULT TIMES.

KUDLOW: BUT SENATOR,
WHAT IS -- THE CURRENT LAW RATE IS 15%. YOU'RE TAKING THE CAP
GAINS RATE DOWN TO WHAT?

MCCAIN: FIRST DOWN TO
10%, I WOULD LIKE TO SEE IT, AND GRADUALLY EVEN MAKE IT LOWER.
LOOK, WHY SHOULD WE TAX PEOPLE'S

GAINS TWICE? WHY
SHOULD WE TAX THEM TWICE, OKAY? THEY MAKE AN INVESTMENT, THEY
SHOULD BE ABLE TO GET THEIR RETURNS ON THEIR INVESTMENT. AND
CAPITAL GAINS IS OBVIOUSLY -- LOW CAPITAL GAINS TAX IS PROBABLY
THE GREATEST INCENTIVE FOR INVESTMENT THAT WE HAVE IN AMERICA
TODAY. AND SO, LOOK, I'LL BE GLAD TO LISTEN TO SMART PEOPLE LIKE
YOU, LARRY, BUT THE WORST THING WE CAN DO IS TELL PEOPLE WE'RE
GOING TO RAISE IT, AND THAT, OBVIOUSLY, WOULD CHILL INVESTMENT IN
AMERICA, RIGHT?

KUDLOW: WELL, WITH
YOUR LOWER CAPITAL GAINS TAX, WHICH IN A RECENT SPEECH YOU SAID
7.5% FOR TWO YEARS, ARE YOU SURPRISED, THOUGH, THAT RESPECTED
POLLSTERS LIKE SCOTT RASMUSSEN OR INVESTORS BUSINESS DAILY ARE
STILL SHOWING YOU RUNNING NECK AND NECK, EVEN WITH MR. OBAMA?
BACK IN 2004, PRESIDENT BUSH BEAT JOHN KERRY BY 11 PERCENTAGE
POINTS AMONG INVESTORS. NOW, YOU'VE GOT A LOWER CAP GAINS TAX.
MR. OBAMA PROPOSES TO RAISE IT FROM 15% TO 20%. EXCEPT YOU'RE
STILL RUNNING EVEN IN THE POLLS. CAN A REPUBLICAN WIN RUNNING
EVEN AMONG INVESTORS? AND WHY DON'T YOU THINK YOUR MESSAGE ON
CAPITAL GAINS HASRESONATED WITH A BIGGER MARGIN
AMONG INVESTORS?

MCCAIN: I'M NOT SURE,
EXCEPT OBVIOUSLY, WHEN HE BROKE HIS WORD THAT HE WOULD TAKE
PUBLIC FINANCING IF I ALSO DID, HE SIGNED A PIECE OF PAPER, THAT
OBVIOUSLY, HE'S HAD A HUGE MONEY INVESTMENT. LOOK, I'M A 7.5%,
I'D LIKE TO KEEP IT PERMANENTLY AT 7.5%. RIGHT NOW, WE NEED MORE
INVESTMENT IN AMERICA AND IN THE STOCK MARKET AND IN BUSINESSES
AND INVESTMENT THAN EVER BEFORE IN THESE DIFFICULT TIMES. SO,
IT'S PRETTY CLEAR THAT IF WE KEEP THEM LOW, WE WILL
PROVIDEANOTHER TOOL FOR ENCOURAGING
INVESTMENT. LOOK, WE ARE -- I AM SO HAPPY WE ARE WHERE WE ARE. I
SEE A LEVEL OF ENTHUSIASM OUT HERE IN THIS CAMPAIGN, LARRY, THAT
IS REMARKABLE. I HAVEN'T SEEN THIS LEVEL OF ENTHUSIASM BEFORE.
I'M VERY OPTIMISTIC, AND WE'RE COMING FROM BEHIND. I'M THE
UNDERDOG. THAT'S WHERE WE ALWAYS LIKE TO BE, BUT WE ARE WITHIN
MARGIN WHERE WE ARE, MY FRIENDS, AND I'M VERY HAPPY WHERE WE
ARE.

KUDLOW: ANOTHER VERY
IMPORTANT TAX FOR THE STOCK MARKET INVESTORS, OF COURSE, IS
CORPORATE PROFITS, PROFITS OF THE MOTHER'S MILK OF STOCKS, AS I
UNDERSTAND IT, FROM TIME TO TIME.YOU'VE PROPOSED TO LOWER THAT
FROM 35% TO 25%. SENATOR OBAMA SAYS THE OTHER DAY, THAT'S MERELY
ANOTHER HUGE AND PERMANENT TAX CUT FOR CORPORATIONS, INCLUDING $4
BILLION FOR THE BIG OIL COMPANIES, BUT IT IS NO HELP FOR WORKERS.
WOULD YOU REACT TO MR. OBAMA'S CRITICISM OF YOUR CORPORATE TAX
CUT?

MCCAIN: HE DOESN'T
GET IT. CORPORATE TAX RATES IN AMERICA, THE SECOND HIGHEST IN THE
WORLD. JAPAN IS ONLY HIGHER. IRELAND HAS 11%. BUSINESS -- I LIKE
TO CALL THEM BUSINESS TAXES, BECAUSE THAT'S WHAT THEY REALLY ARE,
BECAUSE THEY'RE BUSINESSES AND THEY CREATE JOBS AND THEY CREATE
EMPLOYMENT, AND WHEN BUSINESSES CAN GO ANYPLACE IN THE WORLD,
WHERE ARE THEY GOING TO GO? LOOK, I CAN NAME YOU FRED SMITH OF
FEDEX, MEG WHITMAN, OTHER CEOs WHO WILL TELL YOU, WHEN THEY HAVE
A CHOICE TO GO AROUND THE WORLD AND PAY LESS IN TAXES WHERE THEY
CAN INVEST MORE AND INCREASE BUSINESSES AND JOBS, THEY'RE GOING
TO DO THAT. OBVIOUSLY, THEY WANT TO STAY IN AMERICA AND THEY WANT
TO CREATE JOBS IN AMERICA, AND THEY WILL, BUT WE WANT TO GIVE
THEM THE INCENTIVE TO DO SO, AND LOWERING THE BUSINESS TAX, THE
CORPORATE TAXES, IN MY VIEW, THEY SHOULD BE LOWER THAN 25%. WHY
IS IT THAT WE'RE THE SECOND HIGHEST IN THE WORLD WHEN 20 OR 30
YEARS AGO WE WERE AMONGST THE LOWEST IN THE WORLD?

IT'S NOT AN INCENTIVE
TO BUSINESSES AND JOBS IN AMERICA. IT SHOWS, FRANKLY, THAT
SENATOR OBAMA JUST DOESN'T GET IT.

KUDLOW: YOU SAID
YESTERDAY OR THE DAY BEFORE WHEN YOU WERE IN MIAMI, FLORIDA, THE
DEMOCRATIC CONGRESS IS GOING TO REMOVE TAX INCENTIVES OR TAX
PREFERENCES FOR 401(k) ACCOUNTS. OF COURSE, THAT IS A HUGE
INVESTOR ISSUE. WHAT DID YOU MEAN BY THAT? WHAT IS THE PLAN THAT
DEMOCRATS WANT TO TAKE AWAY FROM 401(k)s?

MCCAIN: WELL, THAT'S
EXACTLY WHAT THEY'RE SAYING, AND BARNEY FRANK, WHO IS POWERFUL,
CHAIRMAN OF A POWERFUL COMMITTEE IN THE HOUSE, SAID WE'RE GOING
TO RAISE TAXES AND WE'RE GOING TO INCREASE SPENDING. THAT'S
EXACTLY THE WRONG THING TO DO IN THE ECONOMIC DIFFICULTIES WE
HAVE. HOW DID WE GET INTO THIS DITCH? WE RAN UP A $10 TRILLION
DEFICIT ON OUR KIDS AND HALF A BILLION DOLLAR DEBT TO CHINA. SO,
OBVIOUSLY, THEY WANT TO TAKE THE 401(k)s AND USE THAT MONEY TO
GIVE THAT TO THE GOVERNMENT TO SPEND, RATHER THAN PEOPLE, AND I
THINK THAT'S VERY DANGEROUS DISINCENTIVES TO SAVINGS, WHICH IS
EXACTLY THECAUSE OF OUR PROBLEMS, AS YOU
KNOW.

KUDLOW: LAST ONE,
SENATOR, AND I APPRECIATE YOUR TIME VERY MUCH. AMERICANS HAVE AN
INNATE SENSE OF OPTIMISM AND CONFIDENCE ABOUT STOCKS IN THE
ECONOMY. THE RASMUSSEN POLL SHOWS 73% BELIEVE STOCKS WILL BE MUCH
HIGHER FIVE YEARS FROM NOW THAN THEY ARE TODAY. IS THERE A WAY
FOR YOU IN THE CLOSING DAYS OF THIS CAMPAIGN TO APPEAL TO THE
INNATE SENSE OF OPTIMISM THAT AMERICANS HAVE? IS THERE A WAY FOR
YOU TO CONNECT WITH THE INVESTOR CLASS?

MCCAIN: WELL, I HOPE
WE'VE CONNECTED WITH THE INVESTOR CLASS BY THEM EXAMINING OUR
PLANS AS WE COME CLOSER TO THE ELECTION, BUT I ALSO HAVE TO TELL
YOU, LARRY, THE PEOPLE WHO WANT TO INVEST ARE JOE THE PLUMBERS OF
THIS WORLD WHO WANT TO OWN THEIR SMALL BUSINESS, THEY WANT TO
EMPLOY PEOPLE, AND THEY WANT TO INVEST IN THEIR FUTURES AND IN
THE STOCK MARKET AND MAKE INVESTMENTS, 401(k)s, I.R.A.s AND
OTHERS, SO THAT THEY COULD ENSURE THEIR RETIREMENT AND THEIR
FUTURE. AND JOE THE PLUMBER WAS ABLE TO DO SOMETHING THAT WE
HADN'T BEEN ABLE TO DO THIS WHOLE CAMPAIGN, AND THAT IS
ARTICULATE THE REASON WHY HE DOESN'T WANT TO SEE HIS TAXES RAISED
SO THAT HE CAN USE IT TO BUY A BUSINESS AND CREATE JOBS AND TO
TAKE CARE OF HIS AND HIS FAMILY'S FUTURE. THAT'S WHAT THIS
CAMPAIGN IS BOILING DOWN TO, AND THAT'S WHY WE'RE GETTING CLOSER
AND CLOSER, MY FRIEND.